An penny sized accounting irregularity with Lending Club accounting was brought to my attention by HollowOak at MoneyWalks — LendingClub – all those pennies are adding up. Today, I received an email from Patrick Gannon Senior Vice President at Lending Club addressing the issue (subject = Lender notification – fractional penny rounding).
We are contacting you to let you know about an important update to your account functionality on the Lending Club website. Our team has completed a series of improvements to payment handling that will change some of the numbers you see in your account. One of the interesting challenges we face in a p2p lending marketplace is the many-to-many matching of borrowers to lenders and the impact that has on payment amounts. Each borrower makes a single payment on a loan, which is divided across the lender accounts that funded the loan. This leads to penny-rounding issues that several of you have told us about, and which we are now addressing.
Lenders will see updates to their expected payments. They will now vary by up to $0.01 in either direction for each loan in a portfolio to account for the consistent rounding. The final payment will be a balloon payment to clear out any remaining fractions of pennies, so you should expect that final loan payments in your portfolios will be slightly different from the previous payments. Actual payments to date will also be adjusted, but only if the lender should have received a few additional cents on their payments to date. No lender account will have actual payments adjusted downwards. In total, the net impact across all loans and lenders to date is less than $26.
Please log into your account to view your updated account summary.
We want Lending Club to be a transparent environment, and we will notify you in the future if any other issues impact your experience as a lender. Please feel free to contact me directly with any questions about this change or lending at Lending Club.